This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Western Debt Crisis Is a Revenue Crisis: Opinion

It is truly unfortunate that we are forced to rely upon U.S. data to illustrate this revenue crisis. The U.S. has devoted a much larger percentage of its government expenditures to military spending (by several multiples) than any other nation in the post-Industrial Revolution era. The Soviet Union tried to match the massive Reagan arms-race of the 1980's -- and was completely bankrupted in the effort. Thus the "curve" of the spending chart is severely distorted by huge (and well-documented) explosions in U.S. military spending.

Looking at the chart below, the green line represents Williams' data (i.e the Truth). We see U.S. government spending surging in the latter half of the 1960's (the Vietnam War). We see it accelerate again in the 1980's (the Reagan arms-race). But note that in the last few years of the Reagan regime -- while military spending was still recklessly accelerating -- that actual spending had topped, and even began to decline slightly.

This marked the beginning of the era of declining government services (and real spending on people). Apart from a tiny up-tick in U.S. government spending in the early 1990's (the first war against Iraq), total U.S. government spending (in real dollars) has been steadily declining since the late 1980's.

When we look at the light-blue line (i.e. the official government lies), we see the myth that the U.S. government and its media minions have been trying to sell to the sheep: that the U.S. is in the grip of an out-of-control "spending crisis." Coincidentally the producer of this chart chose the year 2000 as his "base" for assigning a nominal level to these numbers.

It is shortly after 2000 that we see government lies about a spending crisis being ramped-up at exactly the same time that the government's lies about inflation were also increasing at a near exponential rate. The U.S. government has worked very hard at producing the myth that it has been spending too much (on its own people), when in fact that spending has been in steady (perpetual?) decline for several decades.

What is the only other exception to that trend? We see a dramatic spike in U.S. government spending to finance the hand-outs to Wall Street following their self-destruction in 2008. What is absent from this chart? There is not even a tiny up-tick in real U.S. government spending following the infamous "9/11".

Since that time the U.S. government has spent $trillions invading-and-occupying Afghanistan in the War for Drugs . It's spent $trillions invading-and-occupying Iraq in the War for Oil. And total spending for the Orwellian "Department of Homeland Security" (and all of its fascist apparatus) has also likely totaled in the $trillions. But much of what this modern-day Gestapo does is kept totally secret - supposedly as a matter of "national security" - and thus we must attempt to deduce its activities (see "The U.S. Prison-Cell Economy" .

Note what is relevant to this topic however, none of these $trillions on two wars and its own Secret Police was financed out of increased spending (in real dollars). As a matter of logic and arithmetic this means that all of this was funded by cutting what the government spends on its own people - trillions of dollars of cut-backs on social spending.

Already we are presented with several massive myths that have been gleefully propagated by the mainstream media. Let's start with this one: the Afghanistan invasion and the Iraq invasion were wars in much "only a few Americans made sacrifices" (i.e. the soldiers and their families).

Obviously a lie. As the chart on spending clearly shows, in fact all ordinary Americans have been seriously impacted by massive cut-backs in government services. The truth is that only a few Americans did not have to make any "sacrifices" for those two wars.

That would be the tiny group which the Occupy Wall Street movement likes to label "the top-1%." While ordinary Americans have faced substantial hardship as a direct consequence of those two invasions (and the $trillions squandered on Homeland Security), the top-1% were literally being showered with money - the even more infamous "Bush tax-cuts".

Government apologists will argue that my analysis "can't be right", even though (real) statistics don't lie (unlike the U.S. government). They will insist that even if there has been a cut-back in the level of government services that it can't account for all of those $trillions spent on wars.

The apologists are actually partially correct. The suffering inflicted upon the American people by its own government to pay for its wars has not come entirely out of declining services. It has also come from cheating its senior citizens and its own employees in what it pays them.

As I note on a regular basis, lying about inflation is a deceit which pays endless "dividends" to governments -- which explains why devious U.S. statisticians come up with new lies about inflation on a regular basis. It's utterly simple to show how those lies end up cheating its seniors.

Social Security (and several other seniors benefits programs) supposedly have COLA clauses ("cost of living adjustments"). However, when the U.S. government lies and says that annual inflation is roughly 2%, while John Williams honestly calculates U.S. inflation at 10+%, then each and every year it is actually cutting benefits to seniors by approximately 8%. Now that's "austerity"! It is yet more irony that the same senior citizens who most gleefully support the wars of the U.S. government (at the ballot box) are the segment of the U.S. population being most adversely affected by the "guns-not-butter" spending policies of the U.S. government.

It's only slightly more difficult to illustrate how the U.S. government has also been "squeezing" its own workers -- contrary to another even more popular mainstream myth that government workers are ridiculously over-paid. Regular readers will recognize the chart below, the one showing the greater-than-50% decline in the wages of the average U.S. worker over the past 40 years.

Description: hourly_earnings_cpi_lies1964onFEB2012.png

courtesy of http://nowandfutures.com/index.html

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs